Companies that burn cash at a rapid pace can run into serious trouble if they fail to secure funding. Without a clear path to profitability, these businesses risk dilution, mounting debt, or even bankruptcy.
Just because a company is spending heavily doesn’t mean it’s on the right track, and StockStory is here to separate the winners from the losers. Keeping that in mind, here are two high-risk, high-reward companies with the potential to scale into market leaders and one that may struggle to stay afloat.
One Stock to Sell:
Torrid (CURV)
Trailing 12-Month Free Cash Flow Margin: -2.2%
Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.
Why Do We Think CURV Will Underperform?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- 7.9 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Torrid is trading at $1.35 per share, or 7.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than CURV.
Two Stocks to Watch:
Boeing (BA)
Trailing 12-Month Free Cash Flow Margin: -1.1%
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Do We Watch BA?
- Products are seeing elevated demand as its unit sales averaged 69.7% growth over the past two years
- Estimated revenue growth of 10.6% for the next 12 months implies its momentum over the last two years will continue
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 47.6% outpaced its revenue gains
At $219.61 per share, Boeing trades at 569x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Viper Energy (VNOM)
Trailing 12-Month Free Cash Flow Margin: -58.7%
Operating a business model that requires no drilling rigs or production equipment of its own, Viper Energy (NASDAQ: VNOM) owns mineral and royalty interests in oil and gas properties, collecting revenue when operators extract resources from land.
Why Should You Buy VNOM?
- Annual revenue growth of 36.8% over the past ten years was outstanding, reflecting market share gains this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin
- EBITDA margin improvement of 6.4 percentage points over the last five years demonstrates its ability to scale efficiently
Viper Energy’s stock price of $47.54 implies a valuation ratio of 18.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
